The golden handshake is frequently disturbing the proverbial hornets' nest in India, triggering a spate of trade union opposition on the one hand and expression of concern from the armchair intellectuals over the addition of thousands of people to the group of the unemployed on the other. This article focuses on whether golden handshake is really what it means or just an eyewash.

Typically, `golden handshakes' are offered only to high-ranking executives by government organizations, public sector and state government sectors and may entail a value measured in lakhs of rupees. Golden handshakes are given to offset the risk inherent in taking the new job, since high-ranking executives have a high likelihood of being fired and since a company requiring an outsider to come in at such a high level may be in a precarious financial position.Their use has caused some investors concern since they do not specify that the executive had to perform well. In some high-profile instances, executives cashed in their stock options, while under their stewardship their companies lost millions of dollars and thousands of workers were laid off.

Various names have been given to this exercise of removing employees like cost-cutting, removing non-performers which have been affecting almost all the sectors, including the public sector undertakings and government departments. And the immediate victims of the economy measures are the employees, who are being made to pay with their jobs, security, status, etc. Usually a large or small payment is made by a company (depending on its size) to a senior executive upon termination of employment even before the contract ends. And these PSUs adopt golden handshake policy to ward off their staff once and for all under the Voluntary Retirement Scheme (VRS) in the state and the central government sectors and pink slips in the corporate world. It is observed that the employees opting for VRS are generally over 45 years of age (especially in government sectors) and they normally do not plan for their retirement as they still have many more years of service. And it is then that such people suddenly find themselves in a helpless position and find it difficult to think about their future. It is seen that most of the time, they can't decide about the few lakhs of rupees they get by way of compensation package. And so end up burning their fingers by starting business ventures without proper planning and in the worst case, use the money for wine and in the other vices.

HRM Review Magazine, Golden Handshake, Voluntary Retirement Scheme, VRS, Electronic Data Systems, EDS, public sector, state government sectors, Financial Institutions, Tata Engineering and Locomotive Co-operation Limited, Indian Airlines, Patni Computer Systems Limited, IT and BPO Services, Kingfisher Airline.